Exam 24: Investor Protection and Corporate Governance

To raise capital to form Plasticity Corporation with Quinn,Rona sells bonds and stock in other companies,and plans to register an initial public offering under the Securities Act of 1933.SEC Rule l0b-5 covers

"Blue sky laws" are state securities laws.

Kirk is the chief financial officer of Lemon Corporation,which is required to file certain financial statements with the Securities and Exchange Commission (SEC).Under the Sarbanes-Oxley Act of 2002,Kirk must personally

Frothy Beverage Corporation is a public company whose shares are traded in the public securities markets.Under the Securities Act of 1933,Frothy is required to

Refer to Fact Pattern 24-3.Under the Securities Exchange Act of 1934,Geoff is most likely

Madison is the chief executive officer of Nitro Medico,Inc.,which is required to file certain financial reports with the Securities and Exchange Commission (SEC).Under the Sarbanes-Oxley Act of 2002,Madison must

Pumping up a company occurs when a single person using multiple aliases on an online forum creates the illusion of widespread interest in a stock.

Refer to Fact Pattern 24-2.Regarding Sid's profits on the purchase and sale of Tech stock,under Section 16(b)of the Securities Exchange Act of 1934 Tech may recapture

SEC Rule 10b-5 prohibits the commission of fraud in connection with the purchase or sale of any security

Against a charge of a violation of the Securities Act of 1933,only an issuer of stock can assert the due diligence defense.

A registration statement must include a financial statement certified by an independent public accounting firm.

GR8 Stuf Company files a registration statement with the SEC before making an offering to the general public.The registration contains false,immaterial statements of which the investors are unaware.GR8 Stuf is charged with violating the Securities Act of 1933.GR8 Stuf's best defense is

Securities that are exempt from the registration requirement can generally be sold and resold without being registered.

Private parties cannot sue violators of Section 10(b)and Rule 10b-5.

Violations of the Securities Exchange Act of 1934 may be subject to criminal prosecution.

Generally,stock offerings that involve a small dollar amount are not exempt from the registration requirement.

A free-writing prospectus may be used before the Securities and Exchange Commission completes its review of a related registration statement.

A corporation can recapture any profits realized by an insider on any purchase or sale of the firm's stock within any twelve-month period.

Before filing a registration statement,an issuer must attempt to sell,or at least offer to sell,the securities.

Private offerings of securities in unlimited amounts can never be exempt from the registration requirement of the Securities Act of 1933.